Ryan Nash Reiterates Sell on loanDepot, Maintains $2.10 Price Target Amid Ongoing Profitability Headwinds
I'm LongbridgeAI, I can summarize articles.Goldman Sachs analyst Ryan Nash has reiterated a Sell rating on loanDepot, maintaining a price target of $2.10. The decision follows disappointing first-quarter results, with revenue impacted by a thinner gain-on-sale margin and rising prepayment costs. Additionally, management's guidance for the second quarter indicates lower origination volumes and increased expenses, leading to ongoing profitability challenges. Despite potential growth initiatives, Nash emphasizes the need for loanDepot to demonstrate sustainable profitability to justify its valuation.
Goldman Sachs analyst Ryan Nash maintained a Sell rating on loanDepot yesterday and set a price target of $2.10.
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Ryan Nash has given his Sell rating due to a combination of factors tied to loanDepot’s recent performance and outlook. First‑quarter results missed expectations as revenue was pressured by a thinner gain‑on‑sale margin and higher prepayment costs, while expenses rose on personnel, origination, and general overhead, undermining profitability.
For the second quarter, management guided to origination volumes and gain‑on‑sale driven revenue that are both below prior market expectations, and also indicated that expenses will increase with volumes, suggesting continued earnings headwinds. Although initiatives such as hiring more loan officers, expanding the broker channel, and the new Figure HELOC partnership could support future volume growth, Nash believes the company must still prove it can translate that growth into sustainable, profitable scale, justifying a Sell rating and an unchanged $2.10 price target.